In his 2024 Budget Speech, the Minister of Finance, Mr Enoch Godongwana, announced that the government has provided Transnet with a R47 billion guarantee facility to support its recovery plan and meet its immediate debt obligations. The Minister was at pains to emphasise that the guarantee comes with conditions that require Transnet to focus on its core activities, and for the state logistics entity to introduce private sector partnerships.

This will improve Transnet’s sustainability and support the implementation of the Freight Logistics Roadmap, which was approved by Cabinet in December 2023 in an effort to address South Africa’s increasingly unreliable logistics system.

“The roadmap outlines immediate steps needed to improve port equipment, locomotive availability and network security. It also sets out a clear path for enhancing efficiencies, facilitating the introduction of competition and leveraging the financial and technical support of the private sector. In this regard, third-party access to the freight rail network will be introduced by May 2024,” the Minister said.

Speaking about ports, he said a private partner has been secured to upgrade Pier 2 of the Durban Container Terminal, adding that this should increase private investment in equipment, enhance technological capability and improve operational efficiency.

On the electricity sector, the Minister acknowledged that load shedding is a problem that confronts all South Africans, disrupting production, operations and livelihoods. “Reforming the sector will result in long-term energy security. We took the necessary decisions in the past five years and these are bearing fruit. To promote further investments in renewable energy, this budget proposes an increase in the limit for renewable energy projects that can qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts,” the Minister said.

The government will release the report on the independent review of Eskom’s coal-fired power stations in the coming week. The review was done to inform part of the conditions attached to the debt relief plan. “The recommendations will feed into Eskom’s corporate plans to bolster accountability and oversight. It is through the combination of private investment in new energy projects, rooftop solar installations and improvements in Eskom’s generation fleet that load shedding will reduce, and reliability and security of supply improve,” the Minister said.

“In addition, to support these efforts, we are introducing a new R2 billion conditional grant over the medium term to fund the rollout of smart prepaid meters. This will begin with municipalities that have been approved for debt relief,” he said.

Sakhile Mokoena

22 February 2024